Investing

4 Stocks to Buy Trending Higher in Top S&P 500 Sectors

For all the ups and downs in the market this year, we have basically gone nowhere. The S&P 500 closed 2014 at 2058, and its closed Tuesday at 2080, so a whopping gain of a little over 1%. In a directionless market, investors need to find stocks to buy that are in the right sectors and that have the right attributes. In a new report from Oppenheimer, the technical team combines three metrics to come up with top stocks to buy now.

Clearly certain sectors are leading the market despite the sideways move of the overall S&P 500. The Oppenheimer analysts combine a rigid top down strategy to find to stocks to buy even in weak performing sectors. The analysts screen each sector relative to the S&P 500, identify an industry of leadership relative to the sector and finally, find the stocks that are driving leadership versus each of the industries.

We screened the list and eliminated the underperforming sectors and found four top stocks to buy now.

Intuit

This company has been on a roll this year and hits all the metrics in the technology sector. Intuit Inc. (NASDAQ: INTU) is a company that loves income tax time as its Turbo Tax product is one of the most widely used, and sales are expected to be very solid once again this year. It is also well-known for the QuickBooks line of accounting software, which is used by firms big and small. The company announced earlier this year it is launching QuickBooks Online Self-Employed, a new product that makes it easy for the rapidly expanding population of freelancers and independent contractors to handle small business accounting. The company estimates 43% of workers will be self-employed by 2020.

Intuit has served small businesses and accountants with QuickBooks for more than 20 years. The company was an early innovator in cloud accounting when it first launched QuickBooks Online in 2001. The company recently announced that QuickBooks Online has more than a million paying subscribers, cementing its market leadership as small businesses shift to the cloud.

Intuit investors are paid a 0.95% dividend. The Thomson/First Call consensus price target for the stock is $101.53. The stock has blown through that level and closed Tuesday at $104.64.

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Cigna

This company makes the grade in the health care sector. Cigna Corp. (NYSE: CI) is a major health services organization that provides insurance and related products and services in the United States and internationally. All products and services are provided exclusively by or through operating subsidiaries of Cigna, including Cigna Health and Life Insurance Company, Life Insurance Company of North America, Cigna Life Insurance Company of Canada or their affiliates.

The health care giant offers integrated suite of health services, such as medical, dental, behavioral health, pharmacy, vision, supplemental benefits and other related products, including group life, accident and disability insurance. Cigna maintains sales capability in 30 countries and jurisdictions, and it has approximately 86 million customer relationships throughout the world.

Cigna investors are paid a tiny 0.03% dividend. The consensus price target is $146.71. The stock closed most recently at $138.50.

CarMax

This is the top stock to buy now in the consumer discretionary sector. CarMax Inc. (NYSE: KMX) has benefited from the huge need for consumers to replace their cars and trucks after years of waiting. The company excels in the pre-owned area, and business looks solid for the rest of 2015. Though CarMax does not offer the same manufacturer used car incentives, it does have its own coverage to encourage people to buy used. The company was recently named one of Fortune magazine’s 100 best companies to work for. CarMax continues to grow and has plans to open between 10 and 15 stores each year for the next several years.

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With a slow but sure economy, and some degree of job and wage growth, many analysts on Wall Street feel that the company has solid upside potential. The consensus price target is posted at $76.64. Shares closed Tuesday at $72.59.

Goldman Sachs

This company hits on all the right cylinders in the financial sector. Goldman Sachs Group Inc. (NYSE: GS) has a gigantic institutional equity desk, a solid debt and derivatives business, an ultra-high net worth clientele, top investment banking and capital markets expertise. The firm continues to be a dominant force around the world, and it is one of the very few firms that dictate who can be a client at the firm.

In Investment Banking, the company has the preeminent client franchise. Goldman Sachs advised on more than $1 trillion of announced transactions last year, the highest level since 2007. It also has maintained a leading market share over the past 25 years. It maintained a market position when M&A activity was dominated by technology in 1999, by financials in 2008 and by natural resources in 2014. The bottom line is, regardless of where market strength is in any given year, Goldman Sachs is up to the task.

Wall Street analysts like the earnings estimates going forward and feel the bank’s valuation is attractive at current levels. With the IPO pipeline still jammed with deals, the company should continue to excel in the equity capital markets.

Goldman Sachs shareholders are paid a 1.25% dividend. The consensus price target is $208.17, and the stock closed Tuesday above that level at $209.02 a share.

ALSO READ: 3 Top Big Oil Picks for Safety and Big Dividends

The Oppenheimer team has pinpointed the strongest stocks in all S&P 500 sectors. We stuck with the best stocks in the strongest sectors themselves. These four stocks to buy are very appropriate for long-term growth accounts.

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